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Preference Evolution and Reciprocity

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  • Rajiv Sethi

    (Barnard College, Columbia University)

  • E. Somanathan

    (University of Michigan)

Abstract

This paper provides an evolutionary theory of reciprocity as an aspect of preference interdependence. It is shown that reciprocal preferences, which place negative weight on the payoffs of materialists and positive weight on the payoffs of sufficiently altruistic individuals can invade a population of materialists in a class of aggregative games under both individual selection and random matching. Such preferences are efficiency-reducing when they are rare and efficiency-enhancing when they are widespread, suggesting that they can persist even under group selection and assortative matching. In comparison with simpler specifications of preference interdependence (such as pure altruism or envy), the survival of such preferences is therefore less sensitive to details of the evolutionary selection process.

Suggested Citation

  • Rajiv Sethi & E. Somanathan, 1999. "Preference Evolution and Reciprocity," Game Theory and Information 9903001, University Library of Munich, Germany, revised 12 Mar 1999.
    • Handle: RePEc:wpa:wuwpga:9903001
    Note: Type of Document - Acrobat PDF; prepared on IBM PC ; to print on HP/PostScript; pages: 26 ; figures: included
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    References listed on IDEAS

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    More about this item

    Keywords

    Reciprocity; Evolution; Preference Interdependence;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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